Are You Making Home Pricing Mistakes?
There’s a psychological value to an asking price ending in 9, like $399,000. But potential buyers searching for $400K-$450K homes won’t see it.
NEW YORK – Pricing isn’t always a simple, straightforward process – and it can waste time and money, and cause frustration for both agents and sellers.
A common error is ending a price in nine. While there’s a psychology to pricing attitudes, Deborah Bacarella of RE/MAX Advantage Plus in Boca Raton says there’s also a downside: “I find that when the seller prices at $599,000, you lose all the homebuyers who started their search at $600,000,” she says.
As a result, agents should advise sellers to price in even increments to capture more online searchers.
It’s also essential that clients don’t compare themselves to the neighbors.
“When this happens, sellers are rarely comparing apples-to-apples and don’t take into consideration that the other house had features and amenities that their home doesn’t have,” says Candy Miles-Crocker at Long and Foster Real Estate in Washington, D.C.
Another common error is pricing too high from the start. Many buyers overlook a home in the first few weeks if it’s listed too high. Many of those initial buyers will eventually find something else or will expect a discount.
“If you have a seller who is not willing to price where you believe the value is, discuss and agree that once you have had 10 showings without an offer, it is time for a price reduction down to your price recommendation,” says Alyssa Granlund at Edina Realty in Minnesota.
Finally, many sellers erroneously believe that they’ll recoup all the money spent on home improvements. Agents need to make sure they understand the comprehensive competitive analysis and adjust appropriately for any home improvements they’ve done.
Source: RISMedia (12/20/21)
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